future building
DESCRIPTION
Future Building outlines the key principles and process for developing strategy under conditions of uncertainty and change.TRANSCRIPT
Future Building in BusinessStrategy in times of uncertainty
Wednesday, 2 March 2011
Dr Norman ChornEconomist
Future Builder
Organisation architect
Thought Leaders Mentor
Wednesday, 2 March 2011
Why are we here?
Because our planning doesn’t work well in uncertainty
Because we need more planning in uncertainty
Because we need to create our own future
Wednesday, 2 March 2011
TodayThe “new normal” - why
conventional planning won’t work
for you anymore
Strategy vs Planning in your
business
Key principles of FutureBuilding
DIY FutureBuilding
Wednesday, 2 March 2011
ResourcesPre-readingKeynote deckInteractive workbookFutureBuilding plannerThe networkMe (if you’re really desperate!)
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The new normal
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Have you noticed?New economics✓ more regulation✓ lower growth✓ savvy consumers✓ zeroing transaction costs✓ low cost competitors✓ BRIC taking lead
New social✓ fluid families✓ ageing population✓ suspicion of politics✓ suspicion of big biz✓ more conservatism✓ anti-globalisation✓ social justice✓ protectionism
New environment✓ climate change✓ emissions legislation✓ degradation of soil, air, water✓ cost of energy✓ new forms of energy
New technology✓ online impacts everything - rapid paradigm changes✓ global online services industry✓ technology enabled new work modalities✓ democratisation of media✓ rapid innovation and obsolescence
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Jeff Brenman
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Assumptions are key
...but the environment keeps changing
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If only we’d seen this coming!Wednesday, 2 March 2011
Is planning different to strategy?
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A simple distinction
Planning = setting objectives and actions to achieve a goal
Strategy = positioning and equipping the organisation for the future
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Planning (Jomini) Strategy (Napoleon)
Approach
1. Establish your base of ops
2. Determine objective point
3. Choose lines of ops to move your army forward
1. Learn from history and your experience
2. Clear your mind - immerse yourself in battle
3. Wait for flash of insight as elements combine in unique way
4. Act with resolution
SuccessBy having greater force than enemy at objective point
By identifying the “decisive point” in the battle
Objective Chosen before - then move to achieve it
Not chosen before - emerges as you learn and adapt
Key Objective point Decisive point
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7 Key principles of FutureBuilding
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The future does not exista priori
1
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The future is a set of possibilities that can be influenced by purposeful behaviour
discovery
choice action
2
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No monarchy has fomented its own overthrow
3
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Embrace uncertainty
4
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FutureBuilding does not attempt to predict the future
Alternative futures are possible
5
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FutureBuilding focuses on developing the capabilities needed for alternative futures
6
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It is better to be vaguely right than completely wrong
Clem Sunter7
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Examples of future worlds
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Negotiating the future
NoNo
Yes
Yes
Yes
Current negotiations in 1980s
Is settlement negotiated?
Transition rapid and decisive?
Policies sustainable?
No
No
No
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Lo concern by public for health
Lo social engineering
Hi social engineering
Hi concern and public
mobilisation
Public health in Australia
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Progressive society and
policies
Lo cost of energy
Hi cost of energy
Defensive society and
policies
No option Sydney
The lucky city
Not our problem
Batten down the hatches
Sydney property development
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Your own clients?
External focus on markets and
customers
Values and self direction
Process and controls
Internal focus on organisation
and people
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What are scenarios?
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Good scenarios
Coherent stories about alternative futures
They have a series of plot lines that intersect and produce an internally consistent story
Based on the key drivers and uncertainties from the environmental scan
Can be external or internal
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Scenarios created by..
Right brain creative process - it’s ok to have fun!
Social interaction
Learn by doing
Pathfinders are key
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Current mental models Novelty
Scenarios should balance...
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DIY FutureBuildingWednesday, 2 March 2011
Pre build - get the foundations right
What is the business of your organisation - the business definition:
• product / services?
• customer groups?
• value proposition to each customer group?
What are your KSFs?
What are your clients’ major concerns?
WHAT IS THE FOCAL QUESTION?
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7 steps to Build your Future
3. Skeleton scenarios
2. Deductive or inductive scenarios?
1. Trends, drivers and uncertainties
4. Flesh out scenarios
5. Winning strategies
6. Key capabilities
7. Plan for capabilities
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Deductivedefine the broad structure of the alternative futures first...
...then identify the story within each scenario
Inductiveidentify the story line first
...then define different scenarios to complete the range of alternative futures
1
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In your “environment”, identify:✓ key trends✓ important drivers of change✓ most significant uncertainties
*Remember to use Pathfinders
2
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Select the dimensions / plot lines that explain the most DIFFERENCE in the data. Then construct a set of skeleton scenarios --> alternative futures
3Wednesday, 2 March 2011
Make the stories (scenarios) as complete as possible - describe what life is like in that future world
Flesh out the skeletons into stories for each of the alternative futures4
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Develop the “winning” strategy for you to win in each of these alternative futures5
Consider all aspects of the strategy✓ product / service✓ market / customer✓ value proposition✓ how you will differentiate yourself✓ relationship architecture✓ how you will make a return
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Identify the key capabilities you will need to develop to execute the winning strategies6
Several classes of capability✓ knowledge of techniques, processes, issues✓ understanding of industries, types of clients✓ key skills and competencies✓ relationship architecture✓ reputation, track record, credibility✓ assets, tools, infrastructure✓ qualifications, licenses, permits
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67 And now for your action planning
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Future capabilities
Future capabilities
Future capabilities
Future capabilities
Action plan to develop future capabilities
Now
Some 50 - 70% of these capabilities
are likely to overlap
Back-casting
FutureWednesday, 2 March 2011
Building your future1. Choose between deductive or inductive scenarios
2. Identify key trends, drivers and uncertainties
3. Construct your skeleton scenarios by choosing orthogonal dimensions or the most significant plot lines
4. Flesh out alternative stories of the future
5. Build “winning strategies” for each alternative future
6. Identify the key capabilities required for each strategy
7. Action plan to develop common capabilities
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Wednesday, 2 March 2011
“You can’t just ask customers what they want and then try to give that to them. By the time you’ve got it built, they’ll want something new.
There’s an old Wayne Gretsky quote that I love. ‘I skate where the puck is going to be, not where it has been..’”
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“The complexity for minimum component costs has increased at roughly a factor of two per year”
Extract from Moore's original paper in 1965
Gordon Moore - co-founder of Intel
Thanks to Craig Rispin
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“Don’t let the future just happen to you - go and create you own ideal future!”
Craig Rispin - Futurist
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The future is not what it used to be...
The world has changed - conventional approaches no longer work
Don’t attempt to predict the future
The future can be influenced
Pathfinders are necessary to envisage alternative futures
Focus on building strategies and capabilities for alternative futures
Skate to where the puck is going to be
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Wednesday, 2 March 2011